For several years, the major incumbent local exchange carriers (ILECs) have been heralding the benefits of transitioning their networks to IP-technology. The FCC has supported this transition. This is the 1st entry in a two part-series. Believing “less really is more” and reviewing related decisions in one entry may be a good idea, this entry highlights the FCC’s recent decisions on the policies and procedures for implementing the IP transition. Implications for end users and competitive carriers will be the focus of the 2nd entry in this series.

The rules on copper loop retirements and the IP transition for retail voice services apply to price cap and rural rate-of-return ILECs with minor distinctions. The rules on wholesale services pertain principally to the price cap ILECs as these carriers offer the vast preponderance of special access and wholesale platform voice services.

An important caveat is that each ILEC sets its own plans and time lines for implementing its IP transition. There are no deadlines or due dates. Subject to the rules adopted in these FCC decisions, the ILECs may implement their IP transitions locally, state-wide or throughout all of their service territories. The same is true for copper loop retirements.

The procedural paths that include notices to customers or competitors vary.

Copper Loop Retirements. The ILECs must simply provide written notice to affected customers (180 days to competitive carriers, 180 days to enterprise customers when copper to the premises will be replaced with fiber to the premises (FTTP), and 90 days to residential customers for replacing copper with FTTP). When retiring copper loops, ILECs are not required to file applications with or notify the FCC. The FCC declined to require the ILECs to make available retired copper loops to CLECs, although it allows the carriers to negotiate as they see fit.

Based on its reading of Section 214(c) of the Act, the ILECs must notify their customers, but are not obligated to seek the FCC’s prior consent or approval under Section 214 of the Act to implement copper loop retirement projects.

Wholesale Services. For wholesale services (special access services and wholesale voice service platforms), each ILEC must file applications to discontinue service under Section 214 of the Communications Act. Broadly speaking, ILECs must show in their Section 214 discontinuance applications that replacement IP wholesale services are “reasonably comparable” to the TDM services being replaced in terms of capacity, price and quality of service. For example, 100 Mbps Ethernet access service priced at market rates is not a reasonably comparable replacement for DS-1 special access service; substantially more bandwidth priced at a noticeably higher rate is not “reasonably comparable.” Importantly, “price-per-Mbps” and the net cost of the IP replacement special access service cannot be significantly higher than the pricing for the DS-1 or DS-3 service being replaced.

As a Section 214 discontinuance application is filed with the FCC, a copy must be served on the ILEC’s customers—CLECs, IXCs, wireless carriers and end users that acquire special access services directly from ILECs—as well as government offices specified under Section 214. Assuming the ILEC’s application meets the “reasonably comparable” standard, the FCC will “automatically grant” an ILEC’s Section 214 discontinuance application thirty (30) days after the application is placed on Public Notice.

This “reasonably comparable” standard is an interim rule, subject to the outcome of the FCC’s ongoing investigation into the price cap ILECs’ rates, terms and conditions for special access services—particularly DS-1 and DS-3 services. A final decision in the FCC’s multi-year special access investigation is expected this fall.

Taking something of a Neanderthal-like approach and demanding the IP transition proceed on terms fixed by the ILECs, USTelecom filed a petition for review with the D.C. Circuit. Pet. for Review, United States Telecom Assoc. v. FCC, et al., Case No. 15-1414 (D.C. Cir., Nov. 12, 2015). Among its arguments, USTelecom maintains that Section 214 does require ILECs discontinuing TDM special access services or voice platform services to consider the impact of the discontinuances on competitive carriers’ customers and that the “reasonably comparable standard” should not apply to wholesale service IP transitions pending the outcome of the FCC’s special access investigation.

Retail Voice Services. The FCC’s decision to facilitate the IP transition for retail wireline voice services also establishes a series of rules for “automatic grants” of ILEC Section 214 applications to discontinue TDM retail voice services. Notice must be provided to end user customers. If the requisite showings are made, the ILECs may begin the transition to IP services 31 days after the applications are filed. In addition to customer notices (via mail or e-mail as authorized by a customer), the ILECs must engage in community outreach activities on the IP transition.

The replacement IP wireline voice services must (i) have substantially similar network performance metrics (latency of 100 ms or least for 95% of all peak period round trip measures and data loss not worse than 1% for packet-based networks); (ii) deliver service availability at 99.99%; and (iii) have the same geographic footprint as the discontinued TDM service. These criteria are intended to be technology neutral; thus, a fixed wireless replacement that meets these criteria is an acceptable replacement technology. Each ILEC must certify that each IP service “platform” meets these requirements; in order to do so, the ILEC must follow the FCC test procedures, except ILECs having 100,000 or fewer subscribers that may use other test procedures.

The cost of the replacement IP service cannot be substantially more than the TDM voice service being discontinued. The IP replacement services must support critical applications such as 9 1 1 and access for persons with physical disabilities and must be interoperable with widely adopted low-speed modem devices, such as fax machines and point of sale terminals, through 2025.